As a Business Broker I often recommend that sellers offer to finance part of the purchase price. There are a number of reasons this is important.
1. More sellers will consider your business. Many buyers will require some type of financing and knowing that you have confidence in the ability of the business to support interest payments is a great selling point.
2. Offering financing often nets you a higher price than you would have received without financing. Some studies back this up and all the reasons aren't known, but consider this. When you make a major purchase and you have cash do you ask for a discount? Many buyers do and so it's natural when making a purchase as large as a business they will want a discount if paying cash.
3. The financing increases your net in another way. Every month you are receiving income and the percentage is almost always higher than you can expect to receive on most investments.
4. Your tax burden may be less since you will not pay tax on the payments until they are received.
5. Perhaps the biggest reason to offer financing is that it does demonstrate to the buyer that you have faith in the business. After all the business will be generating the revenue that will enable the buyer to make the payments.
If you are curious about the value of your business I will work with you to determine the likely value in today's market by comparing your business to other similar businesses that have sold. The cost for this service is nothing more than your cooperation and time.
I've got a short video that explains how I determine an opinion of value based on facts. Take a look and then...Let's do Business.
Here's a link to the video:
http://www.youtube.com/watch?v=UY0tfRjoLxY&list=UUcj_XGTmLKs-UPbL7avjf8A&index=0&feature=plcp
Jon Hunt
Senior Associate
jonhhunt@bellsouth.net
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